Sony inks distribution deal with Chinese internet giant Tencent
A new partnership between ChineseInternet companyTencent Holdings and Sony Music Entertainment will see Tencent distribute Sony’s catalogue in China.
Under the partnership, announced Tuesday, Tencent will promote Sony acts like Bob Dylan, Daft Punk and One Direction in China via itsQQ social network service –which covers online distribution and has more than 820 million monthly active users –as well as through projects like university campus tours, awards shows and online concerts.
Worth over US$135 billion (Forbes), the internet giant has stakes in classifieds site 58.com, search engine Sogou and logistics outfit China South City Holdings. It also has its own private-sector bank where it’s based in Shenzhen and a messaging app; WeChat reached 438 million monthly active users worldwide in June.
This deal with Sony only deepens Tencent’s foothold in the music industry; in November it signed a similar agreement with Warner Music Group, marking the major’s first alliance with an internet company of Tencent’s magnitude. This month Tencent also inked a deal with South Korea’s YG Entertainment, making it the exclusive online distributor for one of the territory’s ‘Big 3’ entertainment agencies. YG, which represents K-Pop acts like Psy, BigBang and 2NE1, had a revenue injection of AU$85 million by LVMH, the private equity arm which owns Louis Vuitton in August, when it held a market value of AU$741 million.
Denis Handlin, chairman & CEO of Sony Music Entertainment Australia & New Zealand and president, Asia said in a statement: “It was most important for us to find a strategic partner that shares our passion for developing the music market through digital music services. The market in mainland China is a rapidly transforming one, with fans that have great passion and interest in music and the artists that bring this wonderful entertainment into their lives."
Handlin was integral in Sony's partnership with South Korean label Chrome Entertainment, which was inked in August last year after he met the label's girl group signing Crayon Pop.
Tencent's partnership with Sony sees bothplay apart in tackling China’s music piracy issues; in 2011 99% of music downloads in China were pirated, placing it below Thailand in terms of revenue gained from digital music sales (IFPI).